Which option is better?

bbasra

Hi,

Mortgage is up for renewal and my current lender has offered :

2yrs at 2.79%+£624

with fee added £512.37 without £509.65 /m

2yrs at 2.99%+£125

With 522.49 without 521.93 /m

No additional or hidden fees at all.

Wondering whats best method to work out which is better. I think the 2.99% is better.

Thanks.

bigadaj

Well assume that the debt at the end will be the same, which it should. Be if the repayment period is the same, then the higher fee is cheaper.

What ltv, multiplier of salary and general credit history do you have. It sounds as though these are pretty good, in which case I personally don't see much point in a two year fix. Base rates ain't going anywhere quickly so I'd be looking at either a tracker or a five year fix, the problem with two year fixes is that you're stumping up another fee in two years for the next deal as well.